Pa. Legislators Set To Outlaw New Montco Tax

June 13, 1986|by DAN FRICKER, The Morning Call

Six months after Montgomery County enacted a tax on new construction to pay for road repairs and mass transit, the state Legislature, under pressure from developers and real estate agents, is poised to outlaw the limited tax.

"The developers and Realtors are a powerful lobby," Paul B. Bartle, chairman of the county commissioners, said yesterday after announcing impending amendments to the state Transportation Partnership Act.

The amendments require that a tax under the 1985 act be levied on all properties within a so-called transportation district, not only on new construction. The changes would, in effect, make the tax a general real estate levy.

The state Senate, despite lobbying by Bartle and other county representative s, is expected to approve the amendments next week and send them to Gov. Dick Thornburgh, who is expected to sign them. The state House passed the amendments last week.

Adoption of the amendments will almost surely result in an increase next year in the county real estate tax. Montgomery County expected to raise $2.5 million to $3 million yearly from the tax, assessed according to the number of vehicle trips a building type generates. "It will be difficult not to have a tax increase," Bartle said. "We will monitor our expenses and try to keep them down."

The commissioners adopted the construction tax last December in the face of opposition by developers and real estate agents. The tax took effect Jan. 1.

The announcement yesterday came a week after the commissioners made five major changes in the tax, in part, to blunt two legal challenges. The suits were filed in county court by the Pennsylvania Homebuilders Association and the Building Industries Exchange of Pottstown.

The county has spent $61,000 in legal fees and $3,500 in expert-witness fees to fight the suits. "We believe that we would have won the matter if we had to go through the courts," said Bartle, an attorney. "We had a good legal position."

Meanwhile, the county was losing the political battle in Harrisburg.

Last week, in an effort to stop the amendments, Bartle and two other county representatives, Arthur Loeben, executive director of the planning commission, and John Smith, special counsel on the tax, met with Senate Majority Leader John Stauffer, R-19th District. "We lobbied not to defeat the legislation," Bartle said. "We lobbied to have the courts decide what the (act's) initial language said."

Despite the lobbying, Stauffer told the delegation that the amendments will pass, although he offered to make them effective next year, allowing the county to keep the tax collected this year, Bartle said. The county declined the offer and will return the $53,000 it has collected to date.

The commissioners will formally repeal the tax after Thornburgh signs the amendments, Bartle said.

In lieu of the tax, the county will use $1.5 million of its $3 million unappropriated surplus for the county's $3 million annual subsidy to the Southeastern Pennsylvania Transportation Authority. The remaining $1.5 million will come from "economies" in the general fund, Bartle said. No funds will be set aside for road repairs.

Bartle bemoaned the loss of the tax. "It's a tremendous concept," he said. "It's happening all across the country. I'm just sorry we can't be in the vanguard."